#SpotVSFuturesStrategy

Spot vs. Futures Trading Strategies

Spot trading involves buying or selling an asset (like a cryptocurrency or stock) for immediate delivery at its current market price. Strategies often include "buy and hold," dollar-cost averaging (DCA), or swing trading, focusing on direct ownership and short-term price movements. It's generally considered simpler and less risky, as it doesn't involve leverage, meaning your potential loss is limited to your initial investment.

Futures trading, conversely, involves contracts to buy or sell an asset at a predetermined price on a specific future date. Traders don't own the underlying asset directly. Strategies like hedging, speculation (going long or short), and arbitrage are common. Futures trading often uses leverage, amplifying both potential profits and losses, and carries higher risk due to the possibility of liquidation. The choice depends on risk tolerance, capital, and market outlook.